State leaders tout rate relief package

Tuesday

Jul 24, 2007 at 12:01 AMJul 24, 2007 at 9:37 PM

If approved, a proposed electric rate relief and reform package will provide Ameren Corp. and Commonwealth Edison customers with discounts ranging from 40 to 70 percent on this year’s bills, with additional credits for "all-electric" customers. The discounts and refunds effectively will slash bills for most customers in half, state officials announced during a stop in Peoria Monday.

Karen McDonald

A combination of electricity rate credits and refund checks that could be mailed by Sept. 1 should allow residents to keep the lights on and crank up the air without as much worry, state officials said in Peoria on Monday.

If approved, a proposed electric rate relief and reform package will provide Ameren Corp. and Commonwealth Edison customers with discounts ranging from 40 to 70 percent on this year’s bills, with additional credits for "all-electric" customers. The discounts and refunds effectively will slash bills for most customers in half.

"What consumers have been clamoring for since they first got their electric bills in 2007 is rate relief, and I know that my office as well as legislators’ offices around the state have received thousands of angry, and at times, desperate complaints from customers," Attorney General Lisa Madigan said. "Critical to this agreement is not just immediate relief, but also long-term relief to ensure that customers are protected in the future."

Madigan joined her father, House Speaker Michael Madigan, Senate President Emil Jones, and other state officials to tout the proposed package at the Greater Peoria Regional Airport on Monday as part of a five-city tour.

The agreement, which is expected to pass, likely will be voted in both the House and the Senate this week. Small businesses will receive similar relief, though larger users of electricity, such as municipalities and large companies, would not benefit, a state official said, adding most larger users already are buying electricity through alternative suppliers.

The deal will provide $1 billion to consumers slammed with rate increases at the beginning of the year following a decade of frozen rates. The reform package also calls for Ameren rate increases of 34½ percent total, phased in through 2010, while Commonwealth Edison’s would increase 24½ percent, officials said.

Customers will receive a check to help offset rate increases they’ve already paid for since January. They also will receive credits or discounts on bills from 40 to 70 percent off the increase from 2006 rates, officials said.

Sen. John Sullivan, D-Rushville, apologized a deal wasn’t hashed out sooner. "I think it’s important, as it’s been mentioned, that we get it right this time, and I believe that we have done that," he said.

The package also includes forming the Illinois Power Agency to buy electricity on behalf of utility customers to ensure customers are protected from sharp future increases. It also would create a public power system to sell electricity at cost to municipalities and rural electric co-ops, Attorney General Madigan said.

That would end the "reverse auction" process that was used for the first time here last year to set the rates presently in effect.

"The reverse auction was flawed from the start because it wasn’t designed to create the lowest prices for customers. Instead, it was designed to benefit Ameren and ComEd corporate owners who want to sell electricity at the highest possible price," Lisa Madigan said, adding her office agreed to dismiss numerous lawsuits against Ameren and ComEd focused on the reverse action.

Mike Madigan said the proposed new power agency could revive the state’s coal mines by potentially generating cheaper electricity than Illinois could buy privately.

"The power agency also can build power plants on its own or in conjunction with private or governmental agencies mainly in downstate areas near the Illinois Coal mines to revive that once very prosperous industry," Mike Madigan said.

Sen. Dave Koehler, D-Peoria, said the proposal will encourage market competition. "Maybe not this next year, but certainly over the course of three years we’ll see that residential users will now have choices as to where they buy electricity from," he said.

Funding for the relief package isn’t coming from state coffers — electric generating companies will pay the bulk of the costs, officials said.

Karen McDonald can be reached at (309) 686-3285 or kmcdonald@pjstar.com.